An individual voluntary arrangement (IVA) is one of several debt solutions available to you depending on your situation. But, what is an IVA?
An IVA is a legal procedure for people in financial difficulty who have unsecured debts. It is a form of insolvency you must be unable to pay your debts to apply for an IVA.
You need an Insolvency Practitioner (IP) to arrange an individual voluntary arrangement. Your IP will assess your finances and send a proposal to those creditors who hold your unsecured debt. You will propose to your creditors that all your available income (after you have paid your household bills) will be used to make monthly payments to them through an IVA solution. These payments will take place over an agreed period, which is usually five or six years. Sometimes a lump sum may also be paid or a combined lump sum with a monthly payment. Once you have made all the agreed payments any remaining debt is then written off.
To decide whether the IVA goes ahead, a creditors’ meeting is called and a vote is taken. Creditors representing at least 75% of those who vote need to vote in favour of the IVA proposal for it to go ahead.
Once the IVA is approved, creditors are unable to take any legal action to recover the debt. A fee is payable but this is included as part of the original monthly repayment when the proposal is agreed.
Once a year, the Insolvency Practitioner reviews your finances and an annual progress report is sent to you and your creditors. You are also notified when the IVA has ended.
Our online Debt Remedy tool will be able to tell you if an IVA is suitable for you. If an IVA is the best solution for you, StepChange Voluntary Arrangements, our IVA service, will support you throughout the process.